ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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50 Years Ago: Clear Up This Oil Mess.

Editorial from Volume IX, Nos 33 and 34, August 24, 1957.

How much foreign exchange are we losing every day, every hour and every minute, by sitting on the proved oil reserves in Assam and just refusing to move a finger to pump up this oil and using it? Foreign exchange worth Rs 25 crores a year which works out to something like Rs 8 per second! And why are we sitting over it and just doing nothing? It is not only because of the dispute about the location of the refinery which is to use this crude, but also because of the prolonged indecision regarding the formation of the company for the production of this crude. As early as December 18, Shri K D Malaviya had announced in Lok Sabha that the Government of India and the Assam Oil Co had reached an agreement, ‘subject to final ratification’, on the formation of a rupee company for the production of crude oil in the Nahor-katiya area in Assam. He said that Government would contribute one-third of the share capital of this company while the Assam Oil Co would contribute the rest. Then followed an interval during which there were rumours that the Government would not accept anything short of 51 per cent of controlling shares in the proposed company and that the Prime Minister himself had put his foot down on the earlier proposal. Either controlling share, that is, 51 per cent of the capital or none at all, was the formula then current.

The Budget debate in the Lok Sabha on the demands of the Natural Gas and Oil Commission has at least cleared up one point, viz, that the terms of Government participation stand. The wisdom of the decision may be questioned for the over-riding control of the Government would remain in any case, it does not depend on Government participation in the share capital of the company. So if the Government does not take up majority shares, what is the point in subscribing only a third of the capital when Government finances are not too comfortable? The debate excited so little interest that the Speaker had to ring in order to get a quorum cleared up nothing else. On the contrary it confirmed the apprehension that the dispute over the location of the refinery would continue to hold up exploitation of Assam oil, costing us Rs 25 crores of valuable foreign exchange every year!

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